GHEORGHE PIPEREA: "The measures taken by Bank of Cyprus violate the right of ownership"

The restrictions placed in Romania by "Bank of Cyprus" violate the elements of the right of ownership stipulated in the Civil Code of Law, namely possession, right to use and the right of the owners to dispose of their goods as they see fit, said lawyer Gheorghe Piperea.

He explained: "The measures adopted by BoC are completely in violation of the rights of companies, not just of physical persons. The bank is basically pushing the title holders into bankruptcy. Unfortunately there is not much that can be done about it. The only option that could be attempted is to begin the foreclosure through garnishment".

According to the legislation in effect, garnishment is one of the means of legal available for requesting and obtaining the fulfillment of the obligations by the debtor, if they fail to do so willingly. If the garnished third party (the bank) has stopped honoring its obligations, the creditors, debtors or the enforcement body can notify the court, to validate the garnishment, in which case the bank may be forced to pay the amounts owed by the debtor.

Starting April 1st, any individual or legal entity -which has an account opened with BoC Romania is confined to withdrawing of a maximum of 4,000 lei from the ATMs of the institution. Any other operations are completely restricted, including internet banking, said Liana Voinescu, Marketing&PR Coordinator of the domestic branch of BoC. Any request for amounts which exceed that limit, will be reviewed individually, and if it is considered exceptional, will be honored, she said.

"The exceptional situations which we have encountered have been reviewed individually", the official of Bank of Cyprus said, and offered as examples of hospitalization cases, where the bank requires medical certificates, or the funeral aids, in which death certificates are needed.

According to Liana Voinescu, the exceptional cases need two days to be honored and even though the payment of wages does not represent, in the construction of Bank of Cyprus, an extraordinary circumstance, companies which have an account opened with the domestic branch of the Cypriot institution can pay the salaries, if they have cash in their current account.

Bank of Cyprus is bankrupt, according to analyst Florin Cîţu, who was writing last week on his blog: "According to any definition, (ed. note: Bank of Cyprus) has entered bankruptcy. The fact that he was unable to pay his debts is made clear by the fact that they have ceased operations and have limited access to the money even in the case of those who had deposits which were guaranteed up to 100,000 Euros. If Bank of Cyprus weren't bankrupt than those funds should be available right away, because it means that BOC can pay its debts".

Ionel Blănculescu, honorary advisor to the prime-minister Victor Ponta, has a similar point of view. In his opinion, the bank's customers "are being mocked", and he said that there are people who made payments and who have those funds stuck at the bank, and didn't reach the supplier's accounts. Last week, Ionel Blănculescu was saying that Bank of Cyprus "would end up bankrupt", and the Romanian National Bank (NBR) should tell people very clearly "what the companies that have their money stuck there should do".

The activity of the branch of Bank of Cyprus in Romania was suspended on April 1st, in order to conclude an agreement for the acquisition of the bank's assets. In the beginning, the suspension was one week, but it was subsequently extended by two more weeks. The Romanian branch of Bank of Cyprus is expected to resume operations on Monday.